Taiwan: New designations for crypto-businesses will have this impact
Since China phased out crypto-trading and mining on the mainland, many crypto-projects have relocated to friendlier shores. In comparison, Taiwan has been decidedly out of the news on the question of cryptos and mining and regulations. In fact, for a long time, there was no single set of laws or regulations which specifically governed virtual currencies in the region.
Can this be an opportunity going forward? Well, Taiwan’s authorities certainly think so.
Good change or…?
Taiwan strengthens cryptocurrency regulation. The Financial Supervisory Commission (FSC) will serve as the main authority responsible and work with tax and law departments to set up rules to regulate the evolving but volatile cryptocurrency market.https://t.co/AFLH7b8IhS
— Wu Blockchain (@WuBlockchain) November 15, 2021
Taiwan’s Ministry of Economic Affairs has taken a significant step on the digital assets front after it formalized the designation of cryptocurrencies. It also appointed a supervisory authority to lead regulations associated with this “emerging” ecosystem.
According to the Cabinet meeting‘s insights, the Financial Supervisory Commission (FSC) will serve as the main authority responsible. It’ll work with tax and law departments to set up rules to regulate the evolving, but volatile cryptocurrency market. Furthermore, the meeting concluded,
“Cryptocurrency businesses will be listed under the category of “finance, insurance and real estate” as “virtual currency platforms and trading businesses” rather than under the category of “software design services.”
Well, this could be an important move. Especially to combat years-long regulatory ambiguity in the virtual currency market. And yet, at the same time, this will also close crypto-loopholes and protect local investors and consumers. At least, that’s what the regulators say.
The crypto-market has surged of late, with the cumulative capitalization going past $3 trillion. This demand is expected to surge even more now that Bitcoin Futures ETFs have been approved in the U.S.
Worth noting, however, that in the past, regulators have shared certain rules to offset illicit activities. Back in July, it enacted new anti-money laundering rules to boost reporting requirements for cryptocurrency exchanges operating on the island.
Make or break moment?
Well, Clara Tsao, Founding Officer and Director of the Filecoin Foundation, certainly agrees. In an online forum, Tsao claimed that such movements could provide a huge opportunity for Taiwan to boost its development of cryptocurrencies. Especially since China has withdrawn its participation. He added,
“Hopefully, Taiwan can be on the positive green side too … I think a lot of regulators in Taiwan are still wrapping their head around what exactly blockchain versus DeFi versus everything else is.”
Having said that, this could also take a turn for the worse, with the aforementioned designations giving way to stricter regulations going forward. Either way, this is a step forward, one that legitimizes the emerging asset class.